Dec. 26 (Bloomberg) -- T4F Entretenimento SA’s plunge from
the world’s most expensive concert promoter to one of the
cheapest has analysts predicting a rebound.

All six analysts who rate the company known as Time 4 Fun
reiterated or raised their ratings to the equivalent of a
“buy” since mid-November, data compiled by Bloomberg show. Sao
Paulo-based Time 4 Fun traded at 10.8 times estimated 2013
earnings as of Dec. 21, the cheapest among global peers after
Germany’s DEAG Deutsche Entertainment AG and South Korea’s SM
Entertainment Co. Based on 2012 profit, the stock had the
industry’s highest ratio at 43.

Time 4 Fun plunged 58 percent since the beginning of
September after billionaire Eike Batista’s entertainment venture
lured away one of its headline shows and weak demand for
concerts from Madonna to Lady Gaga forced the promoter to sell
tickets at a discount. Demand for live events will rise as
growth picks up in Brazil, the world’s second-largest emerging
economy, according to Bruno Piacentini, a partner at Fama
Investimentos.

“It’s definitely worth more,” Piacentini, who helps
manage 1.3 billion reais ($625 million) at the Sao Paulo-based
fund, said in a telephone interview. “The market move was due
to one-time events rather than the company losing value.”

Cirque du Soleil

The stock selloff was triggered by the Sept. 25
announcement that IMX, a partnership between Batista’s EBX Group
Co. and IMG Worldwide Inc., will promote Cirque du Soleil events
in South America. The deal was a blow to Time 4 Fun, the
previous promoter of the Canadian acrobatic show, which was its
biggest draw among regularly scheduled offerings.

The company’s troubles were compounded by the back-to-back
disappointing sales for Lady Gaga’s show in November and Madonna
a month later, each of which were expected to lure as many as
90,000 concert-goers. While tickets were originally priced for
as much as $410 apiece, T4F teamed up with retailer Lojas
Riachuelo in the final week before Lady Gaga’s performance to
hold a two-for-one promotion.

“Weaker demand from the public caused ticket sales to miss
expectations and that, combined with rising costs due to
inflation and mostly the weaker real, led to financial losses
for recent concerts,” Joao Costa Marques, a partner at the Rio
de Janeiro-based investment fund PrismaInvest, which has $10
million in assets under management. “It wasn’t obvious to
include that in the forecast when contracts were signed many
months before the events took place. That’s part of the business
risk.”

Price Target

Time 4 Fun said in a Dec. 10 regulatory filing that lower-than-expected ticket sales and depreciation in the local
currency against the dollar will lead to “weaker” fourth-quarter earnings and possibly 2013 results.

The announcement prompted analysts to cut the average 12-month price target to 10.48 reais a share, down from 17.67 reais
a few days earlier, data compiled by Bloomberg show.

Time 4 Fun’s press office declined to comment for this
story. An e-mail sent to a Lady Gaga representative wasn’t
immediately returned. Madonna’s MDNA tour was “one of the top
10 tours in history,’” Arthur Fogel, the chairman of Live
Nation Entertainment Inc.’s global music division, the tour’s
international promoter, said in an e-mailed response to
questions.

‘Painful Reshaping’

“T4F faces a tough period as competitors seek to build
live music and performance arts share of ticket sales and muscle
into the company’s sponsorship, ticketing and venue management
activities,” John Nelson Ferreira, investment analyst at Nau
Securities Ltd. in London who rates the stock a buy, said in a
Dec. 11 note to clients. Still, T4F is in “a strong position to
see out a painful reshaping of the industry landscape.”

Time for Fun had the potential to return 44 percent as of
the last trading session, compared with an average 27 percent
among Brazilian stocks currently trading below their 12-month
price targets, data compiled by Bloomberg show.

Rebounding growth next year will be the main driver for
Time 4 Fun, Fama Investimentos’ Piacentini said. Growth in
Brazil is expected to drop to 1 percent in 2012, according to
this week’s central bank survey of economists, from 2.7 percent
in 2011. The economists forecast the expansion to accelerate to
3.3 percent in 2013.

“Brazilians are more indebted and the ticket prices are
getting closer to their available disposable income -- spending
on entertainment isn’t the priority,” he said. “Next year, the
economy is already going to have a better growth rate, and since
ticket sales depend on growth, that’s going to mean higher
demand for shows.”